Now you just get whatever quantity your whole investment can buy, including fractions. The option to just buy a whole share only is not currently available except with the workarounds mentioned above.
From a technical aspect, yes.
When Freetrade added fractional shares they didnât change how you buy shares, shares were always bought by value rather than number of shares. Theyâve never supported anything else. The difference is because fractions were never supported it always rounded down to the amount of whole shares your value buy could manage.
Whether you believe it or not is irrelevant, whether you agree with people thinking it is important is also irrelevant - the facts are that some people do want the choice of whole or fractional shares. Whether that is logical or not doesnât matter as ultimately FT has competitors who offer that choice.
If you fail to match your competition that should matter to your investors. It may be that there is space in the market for both options but that is to be seen.
I have accounts with both brokers, plus other, legacy brokers. Trading212 has more stocks, lower fees and gives the option for fractionals or whole shares when purchasing. The UX is not as beginner friendly as Freetrade, but that is mostly because they provide you with more info.
Offering everything their competitors offer would inevitably lead to a complicated and more cluttered app - which is exactly what puts potential/new investors off.
Their competitors offer lots of things - but for me FTâs USP is its simplicity. Itâs why new investors love it.
If FT copy everything every competitor has it would end up being a Bloomberg Terminal.
Well weâre a bit off topic now and this is probably a different discussion. I hope they wonât put whole share buying behind a paywall, as to answer your question in that regard. People can just get that free elsewhere.
As you mentioned it is off topic, but I think itâs quite an interesting question.
When starting out as a noob I can imagine just using all the basic features to get a feel for how investing works, Freetrade seems the perfect choice not too many stocks to keep you puzzled on what to pick, and fees are extremely low (0.45% fee for US stocks), or virtually zero (stamp duty is not a FT fee).
Fantastic! Youâve now been investing for a while and have a large amount in Freetrade, now you want to up your game and invest in other companies and want to look into more fundamentals and analysis (I donât know exactly what Plus includes, I only know that it includes more stocks than basic), now is the perfect time as a customer to decide whether itâs worth upgrading or not.
Note: I still feel like a noob when it comes to investing and I did some studies in Financial Markets at University and read a few books on investing since. I donât think Iâll get Alpha until Iâve invested a lot more money into the market, unless it provides large enough value to make it worth the price.
Sure but the simplest thing that almost everyone will understand is a single share. Not having the ability to buy that either means youâve got to do a lot of educating about fractionals or you lose customers.
As a newbie investor 20 odd years ago I understood what a single share was and could easily monitor a share price. Telling someone that they can only invest a sterling amount and it wonât be whole shares immediately removes that simplicity.
I think making this element a field will resolve the confusion. Either the âÂŁâ field or â# sharesâ field can receive text inputted by the user, with the corresponding field updating.
In terms of UI, there is nothing preventing this. In terms of UX, it is more intuitive.
I also think the â(est.)â needs to become more clear since this will throw users off when they aimed for X shares but ended up receiving Y.
Agreed. I can understand why some people might want whole shares and others like the fractionals by defualt. Fwiw, Iâve just tried to buy a share at a certain price, assuming I would just get 1 share at somewhere near the estimated price. I hate that I now have 1.04 of a share. Every time I look at the share price I now have to work out what the extra 4% that i didnât necessarily want to spend means in profits or losses. And I know someone will say itâs all worked out by the software, but lots of traders are used to whole shares and make their trading decisions based on their previous whole trades.
Assuming Freetrade for whatever reason isnât here in years to come (I hope not, Iâm invested). How many alternative free services are going to be around that will be bothered to buy these 0.04 extra fractional shares back?
As others have said, yes itâs in the new terms of service but it would be so easy to give customers the option between fractional and whole.
Also, while using fractional shares iâve had transactions that end up as ÂŁ9.99, or ÂŁ10.01 instead of ÂŁ10 and so on, so even fractionals are not entirely exact either. (in terms of investment by amount)
And if Freetrade isnât around in ten years (of course we all really hope it is), who is going to buy that 99.9% of a ÂŁ10 share off you and not charge ÂŁ12 for the transaction? Itâs not a full share, so unless you can find a free specialist, you donât even own a share.
Investopedia says: âFractional shares donât trade on the open market; the only way to sell fractional shares is through a major brokerage.â
I know itâs âsupported by the FCAâ, but that doesnât automatically guarantee youâre going to find a cost effective way of trading these pieces of a share in the future.
So if youâre desperate to get in on Amazon for example and donât have a couple of grand on your hip, fractional shares might be the only way to go, and good on Freetrade for enabling it. If I want to buy some $18.22 shares from a startup, please let me buy 1 for $18.22 or two for $36.44 etc. Donât be wasting my time giving me 1.964 shares for $36 or whatever.
Itâs great that fractional shares as an option is finally here but if thereâs any future intention of changing the facility to buy whole shares only as part of paid for feature, I think it would be disastrous for the company while most if not all close competitors offer the option for free.
That might be a dumb question, but is there any difference in terms of âwhat you ownâ and âwho owns whatâ between a whole share and a fractional share?
I think I have read somewhere that if you buy 1.5 amazon share, Freetrade would hold 1 share in your name, while another broker that Freetrade uses would hold the 0.5 share for Freetrade for you. Is that correct?
I donât know if that matters but that one more actor in the equation.
This wouldnât be an issue (debate over whether or not it is anyway aside) if it were possible to place an order denominated in shares rather than GBP, which is a feature Iâve wanted several times even before fractional shares were offered.
e.g. âbuy 100 shares of Xâ, âsell 0.75 shares of Yâ
